Designed with scalability, stability, security and resiliency as the main design features, our platform works with existing technology to speed the quote-to-issue lifecycle and improve operational efficiency.Learn More

Designed with scalability, stability, security and resiliency as the main design features, our platform works with existing technology to speed the quote-to-issue lifecycle and improve operational efficiency.Learn More

How P&C Carriers Can Stay Flexible in a Rapidly Changing World

Nimble,
flexible, agile. They’re all demands placed on every company today, and
their pervasive pressure has turned them into corporate buzzwords. Yet
many property and casualty insurers are left to wonder: What does
increased agility look like, and how does it improve our bottom line?

“Agility is often confused with a speedy, reactive response,” says Baba Prasad, CEO of the Vivékin Group and author of Nimble: Make Yourself and Your Company Resilient in the Age of Constant Change. “We can instead think of agility as a speedy and effective response, not just toward current circumstances but also [to factors] that may now be beyond the horizon.”

In a tech-saturated era, technology offers myriad opportunities for
insurance companies to become more agile, but relatively few have made
agility a priority. According toHugo Moreno at
Forbes, only 27 percent of companies consider themselves “highly
agile,” and only 25 percent say that their internal culture enables
agility.

Here, we look at tools and approaches that can help P&C insurers
improve their agility, allowing for proactive responses to pressures
arising today and in the future.

Strengthen Your Core

At the heart of an insurance company’s critical functions is its core
system — and like the heart, the core system must function optimally in
order for the rest of the company to be able to respond nimbly to new
challenges. Operating on a single core platform provides the stability
insurance companies need, says Joseph Pacor, senior director at SAP.

Michael Costonis at
Accenture calls core transformation “non-negotiable” for P&C
insurers — at least for those that wish to stay competitive. Yet
insurance companies aren’t embracing core transformation at a rate that
allows them to keep pace with technological change. While tools like
artificial intelligence (AI) and blockchains have the power to
revolutionize insurance, “it’s almost irresponsible to be asking which
company or technology will disrupt insurance” when so many insurance
companies haven’t embraced the core system stability offered by tools
like omnichannel customer service, Costonis says.

Core system transformation doesn’t just improve operational
efficiency or maintain market relevance. It also lays the foundation for
innovation, says Shikoli Makatiani of
Turnkey Africa. And it can provide extraordinary business value, as
long as the new core system is focused on changing customer engagement,
leveraging a comprehensive approach to data and fostering innovation, Nathan Golia writes at Digital Insurance.

Partner With Tech Innovators

“Mastery of technology will continue to grow as the great competitive advantage” in insurance, says Argo Group CEO Mark Watson.
Unsurprisingly, insurance companies that are willing to partner with
insurtech firms — whether it’s to provide specialty insurance
well-suited to the digital world or to leverage a world-class SaaS
platform as part of the company’s core system — will maintain a
competitive edge in the face of change.

Partnerships within and beyond insurtech can also improve a P&C
insurer’s ability to provide value-added services. This is an
increasingly necessary justification in an era where technology has cut
out the middleman in so many industries.

“Beyond the core insurance offering, forward-looking insurance
companies are looking at ways to provide ancillary services to offer
additional services to their clients,” says IBM’s Fuad Butt.
For instance, insurance companies offering homeowners policies can
build partnerships that allow them to offer discounts or better rates
for home security, moving, and even cable or Internet packages.

“Insurers must think about the big picture and develop a holistic
approach that is strengthened by InsurTech capabilities, rather than
piecemeal adoption,” says Efma CEO Vincent Bastid.

Take Advantage of New Insurance Models

In many ways, technological innovations are custom-built to
revolutionize the way property and casualty insurers provide coverage.
For instance, the Internet of Things (IoT) is edging personalized
coverage based on actual behavior ever closer to reality, Sarwant Singh writes
at Forbes. Meanwhile, artificial intelligence (AI) has the potential to
partly or totally digitize up to 90 percent of current insurance
industry jobs, says Hugh Terry, founder of The Digital Insurer.

It is perhaps no surprise, then, that technology is starting to change the underlying business models of insurance, Sarah Kocianski argues
at Business Insider. The rise of insurtech startups is only one
example. Established P&C insurers are also starting to take a fresh
approach to fundamental insurance topics like policy creation,
underwriting, claims management and reinsurance.

When companies start from a strong core system and are willing to
partner with insurtech and SaaS providers in order to innovate, they can
reach into new realms more easily. Products like micro-duration
coverage, micro policies designed for access via mobile devices, and
increased targeting or individualization in coverage are all natural
extensions of current technologies.

These all provide a way for insurance companies to offer the kind of flexibility and agility that customers want, as well, says Pierre Louis Seguin of Capgemini.

Empower Employees and Agents for Greater Flexibility

While technology can help P&C insurers become more agile,
implementing new technology simply to have new technology won’t always
lead to improvements, says Ilya Bonic,
senior partner and president of career business at Mercer. Instead,
“business growth relies on engaging and empowering the workforce,” Bonic
says. “It still takes employees armed with the right skills and
opportunities to develop innovative solutions to advance their
businesses.”

A well-thought-out approach to insurance technologies, including core
system changes, should include employees’ insight and training.

Describing Northwestern Mutual’s shift to a more agile platform, client digital experience manager Jill Schindler speaks
highly of the company’s efforts to get employees on board with the new
system. “At the end of the day, we felt a huge sense of accomplishment,”
Schindler says. “Everyone understood what was expected of them” – and
performance thrived as a result.

Technology can also free up employees to adapt in the moment, making
it easier for them to address customers’ specific needs. In a piece for
Forbes, Bain & Co’s Elizabeth Spaulding and Greg Caimi describe
how USAA became a leader in customer service in the financial industry
by freeing their call center staff from a script. Instead, call center
employees are “specifically empowered… to spend as much time as needed
with customers to truly understand their needs and solve their issues on
the first call.”

The good news? The gig economy has made workers more used to flexibility, adaptation and learning new skills in order to add value for their companies and the customers they serve, says Stephanie Stouck, director of solutions marketing at Liveops. Just as technology has driven customers to seek a more personalized approach to insurance, it has also driven insurance professionals to seek a more adaptable, personalized approach to service. P&C insurers can use this adaptability attitude to their advantage in becoming more agile.

Center The Company’s Value(s)

“Being nimble is more important than being right,” says Capriza CEO and founder Yuval Scarlat, recounting an error in prediction the company made in its early days.

“When we were starting out we made assumptions about our potential
customer’s technology usage and needs that weren’t completely accurate,”
Scarlat writes. “Making sure we were listening to the market and
integrating these lessons into our solutions was vital to our success.”

As customer behavior and demands continue to place pressure on
insurance companies, and as society’s incorporation of artificial
intelligence and other tech tools into everyday life continues,
insurance companies have several opportunities to thrive.

These include operating from a strong core system, leveraging
strategic partnerships with insurtech and SaaS providers, and using
employees’ abilities to change their approach to business.

In short, that means using tech advances to become more agile while staying true to their core values.